Having graded our identity predictions from last year, its time to venture forth into the uncharted waters of 2007. The following are our divinations on what is to come:

1. Identity-related acquisitions will slow to a steady pace.

The acquisition market for identity companies has been very heated for the past two years. Several factors (economic cycle, market development, stage of technology cycles, etc.) will combine to slow the pace of that acquisition cycle. This is not to say that identity acquisitions are going to stop. It is saying that they are going to slow down -- to a pace that is more normalized than we've seen the last two years.

2. Venture Capital continues to fund identity companies.

Funding of identity startups will continue in 2007 (as well as follow-on funding rounds), but we do see it shifting a bit. The identity "analytics" space that suddenly sprouted around compliance should slow in its funding as. Additionally, the compliance automation space will most likely see primarily follow-on funding. On the other hand, we expect appliance-based identity startups to attract a lot of attention, as the channel successes of some young identity startups becomes more well known.

3. URL-based identity begins a cycle of real adoption in the blogosphere and alpha geek communities.

URL-based identity overcame many technical and interoperability hurdles in 2006, and got key buy-in from developing communities. 2007 will see the early incarnations of this technology begin a cycle of significant and real adoption in the blogosphere and alpha geek worlds.

4. In 2007, NAC that isn't identity-based becomes yesterday's news.

Most of the NAC conversation seems to focus on the interoperability between Cisco and Microsoft. The coming year will see a significant shift. The divide between "pre-admission" NAC companies and "post-admission" (identity-based) NAC companies will widen, and the term "Network Identity Management" will emerge as significant in the space. Identity-based NAC and Identity Management will "find each other" in 2007.

5. NAC's rise in importance brings back "risk management."

Its not about "securing the network." Its about managing the risk inherent in any truly networked application. As NAC goes fully identity-based, look for the marketers to begin pounding on the "risk management" term. "Risk management" is what compliance and security are all about, and it will get high level attention from technology executives.

First, let me clarify: "network identity management" is what NAC is becoming; "application identity management" is what people commonly think of as "identity management." Application identity management has been the core of the identity marketplace for several years now. This year that core will truly go mainstream - with widespread adoption across major enterprises and beginning moves down-market.

7. Federated Identity will enter the very beginning of mainstream adoption.

For the past several years, federation has been overcoming some of the remaining issues around deployment. Our sense of the marketplace is that those are now largely solved (for the time being, anyway), and that with those obstructions out of the way, federation is about to begin a mainstream adoption cycle. Look for well packaged pure-play federation products to come on strong in 2007.

8. An acquisition will occur in the "user-centric" identity space.

This is our "stretch" prediction for the year. Our sense of the user-centric space is that its about to grow enough to foster an acquisition of one of its players. Nothing you-tube-ish, mind you, but a move that will signal the real "birth" of the user-centric identity marketplace.

9. The enterprise will begin exploring how to use CardSpace in enterprise deployments.

CardSpace has been thought of as a "user-centric" technology. We believe that there is significant, generally unrecognized, desire to use CardSpace in enterprise deployments. We also believe that 2007 will see enterprise architects who begin to think about deploying CardSpace begin to change how it is that they view identity in the enterprise. Can Microsoft ever thank Kim Cameron and Mike Jones enough? We think not.

Some analyst groups like IDC have postulated that compliance will fade as a driver in 2007. We disagree. Compliance keeps chugging along (at least in identity) as the big driver that could in 2007. This driver may begin to fade by the end of 2007, but the spending cycles associated with compliance will carry major identity management deployment projects through the coming year.

There you have it -- ten predictions for 2007. How will we do? Check back at the end of next year to see how we grade our prognostications. What did we miss? Let us know...